Recently one of our older clients brought us his 1957 T1 Return, sort of like “show and tell” for personal tax accountants. I gave it a quick look and was surprised by how similar the format and the basis of calculation is to 2010. The bigger surprise was the tax table. The highest marginal rate was 78% for income over $400,000? But how much is $400,000 in today’s dollars and what about the other brackets? So my curiosity got the better of me and thanks to the internet, I quickly had 1957 CPI figures of 28.47 vs 2010 of 223.49 to get some answers!
This chart actually shouts shut up to higher income earners who compare very favorably to 1957 taxpayers. Middle income earners were significantly better off in the 50’s apparently.
The conclusion…..Ottawa (Liberals and Conservatives) have figured it out….tax the middle class more, that’s where the volume is and keep taxes relatively low for high income earners, they create jobs and wealth…..and of course they make political donations as well! 75% of the first $400 is refundable by the way!
There ends the Taxation History lesson for today, back to reviewing tax returns, thanks for the break!
So very gratifying to know that things have changed since the year I was born! I am paying more taxes than my Father did; (or would have, if he had been doing as well as I am, which he was not). I have to say, I don’t mind paying appropriate income tax if the alternative is reducing my income! Thanks for the lesson!
Excellent article guys. I had no idea that this is how it worked. Thanks!